[10-Q] Jewett-Cameron Trading Quarterly Earnings Report

Rhea-AI Filing Summary

Jewett-Cameron Trading Company Ltd. (JCTCF) posted a sharp reversal to losses in its fiscal 2025 third quarter (ended 31-May-2025) and year-to-date period as higher U.S. tariffs on imported steel/aluminium products, freight inflation and a temporary shortage of cedar fencing inventory weighed on sales and margins.

Quarterly performance. Revenue declined 21 % to $12.6 million, gross margin contracted to 15.0 % (18.6 % prior-year) and the company swung to a net loss of $0.65 million (-$0.18 per share) versus a profit of $0.15 million (+$0.04) last year. Operating loss was $0.69 million after higher logistics costs, tariff-related price mis-matches and a sales mix shift to lower-margin products.

Nine-month results. Revenue fell 9 % to $30.9 million; gross margin slid 300 bp to 17.5 %. Net loss reached $1.88 million (-$0.54 per share) compared with a $0.91 million profit (+$0.26) in the prior-year period. The core Pet, Fencing & Other segment (JCC) lost $2.62 million, while Industrial Wood Products (Greenwood) was slightly loss-making and seed operations were discontinued.

Balance sheet. Cash fell to $1.2 million (Aug-24: $4.9 million) as working-capital needs rose: inventories increased 16 % to $15.3 million and receivables to $6.8 million. The company drew $2.42 million on its new $6 million asset-based credit line (prime +4.75 %; floor 11 %; renewed to 30-Jun-2026). Working capital declined to $18.3 million (Aug-24: $20.5 million) and equity slipped to $23.0 million.

Operational highlights. • Lifetime Steel Post display roll-out lifted product sales 85 % y/y but expansion paused to protect inventory.
• Sustainable MyEcoWorld® bag products grew 265 % y/y; grocery penetration began but tariff cost pressure may slow growth.
• Headcount reduced 33 % YTD; warehouse tech upgrades under way to lower costs.
• 11.6-acre former seed facility remains for sale at $9 million (book value $0.6 million).

Outlook. Management expects Q4 and full-year losses as tariff volatility, weak consumer demand in pet & DIY categories and higher financing costs persist. Strategic focus remains on multi-sourcing outside China, cost control and clearing excess inventory.

Positive

• Line of credit renewed to 30-Jun-2026, providing up to $6 million in liquidity.
• Lifetime Steel Post® sales up 85 % y/y, demonstrating product traction.
• MyEcoWorld® sustainable bag revenue up 265 %, opening new growth channel.
• Headcount reduced 33 %, signalling cost-containment measures.

Negative

• Q3 revenue down 21 % and net loss of $0.65 million versus prior-year profit.
• Nine-month net loss $1.88 million after prior-year $0.91 million profit.
• Gross margin fell 350-360 bp on tariffs, freight and mix pressure.
• Cash declined 75 % to $1.2 million while drawing $2.4 million debt at 12.25 %.
• Inventory up 16 % and cedar shortage hurt fulfilment; working capital tightened.
• Management guides to continued losses in Q4 and full-year FY25.

Insights

Equity Research Analyst

TL;DR – Tariff shocks and inventory mis-steps flipped JCTCF to losses; liquidity adequate but cash burn & margin pressure elevate risk.

The 21 % top-line drop, 360 bp gross-margin compression and $0.65 million quarterly loss underscore the company’s sensitivity to external cost shocks. Cash reserves shrank by $3.6 million in nine months while A/R and inventories consumed working capital, forcing a $2.4 million credit-line draw at a steep 12.25 % rate. Although the line renewal secures near-term liquidity, leverage has effectively re-entered the capital structure and interest expense is rising. Management’s narrative points to Q4 losses, implying limited margin recovery in the near term. Absent a swift stabilisation of tariff policy and demand, book value erosion could accelerate. Shares will likely trade at a discount until evidence of sustainable gross margin rebound appears.

Industry Specialist – Building & Pet Products

TL;DR – Core fencing/pet categories face soft demand, yet patents, sustainable lines and Lifetime Steel Post momentum offer medium-term upside.

Jewett-Cameron retains differentiated IP in Adjust-A-Gate®, Fit-Right® and Lifetime Steel Post®. The 85 % y/y growth in LTP displays validates product-market fit, but scaling is delayed by logistics and capital intensity. MyEcoWorld®’s 265 % surge shows traction in eco-friendly consumables; however, tariff-driven cost inflation could compress category margins unless pricing power improves. Cedar supply issues should be transitory, given management’s aggressive restocking, suggesting wood-fencing sales rebound in FY26. Continued SKU rationalisation, multi-sourcing and automation could restore EBIT once tariff uncertainty settles. For now, execution risk remains high.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MAY 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO ________

COMMISSION FILE NUMBER 000-19954

JEWETT-CAMERON TRADING COMPANY LTD.

(Exact Name of Registrant as Specified in its Charter)

british columbiaA1		NONE 00-0000000
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

32275 N.W. Hillcrest, North Plains, Oregon		97133
(Address Of Principal Executive Offices)		(Zip Code)

(503) 647-0110

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, no par value	JCTC	NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

 Yes

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer

Large accelerated filer  ☐	Accelerated filer  ☐
Non-accelerated filer    ☒	Smaller Reporting Company  ☒
	Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, no par value – 3,518,119 common shares as of July 14, 2025.

Jewett-Cameron Trading Company Ltd.

Index to Form 10-Q

PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	30
Item 4.	Controls and Procedures	30
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	31

1 

PART 1 – FINANCIAL INFORMATION

Item 1. Financial Statements

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

(Unaudited – Prepared by Management)

MAY 31, 2025

2 

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED BALANCE SHEETS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)

		May 31, 2025				August 31, 2024
ASSETS
Current assets
Cash and cash equivalents		$	1,204,719			$	4,853,367
Accounts receivable, net of allowance of $0 (August 31, 2024 - $0)			6,789,582				3,668,815
Inventory, net of allowance of $550,000 (August 31, 2024 - $550,000) (note 3)			15,257,917				13,157,243
Asset held for sale (note 4)			566,022				566,022
Prepaid expenses			705,448				891,690
Prepaid income taxes			—				50,326
Total current assets			24,523,688				23,187,463
Property, plant and equipment, net (note 4)			3,701,506				3,849,800
Intangible assets, net (note 5)			111,597				112,222
Deferred tax assets (note 6)			902,095				341,029
Total assets		$	29,238,886			$	27,490,514
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	1,861,519			$	1,237,988
Bank indebtedness (note 7)			2,422,305				—
Accrued liabilities			1,911,011				1,401,382
Income taxes payable			14,426				—
Total liabilities			6,209,261				2,639,370
Stockholders’ equity
Capital stock (notes 8, 9) Authorized 21,567,564 common shares, no par value 10,000,000 preferred shares, no par value Issued 3,518,119 common shares (August 31, 2024 – 3,504,802)			830,003				826,861
Additional paid-in capital			852,510				795,726
Retained earnings			21,347,112				23,228,557
Total stockholders’ equity			23,029,625				24,851,144
Total liabilities and stockholders’ equity		$	29,238,886			$	27,490,514

Subsequent event (Note 15)

The accompanying notes are an integral part of these consolidated financial statements.

3 

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)

		Three Month Period Ended May 31,								Nine Month Period Ended May 31,
		2025				2024				2025				2024
SALES		$	12,605,344			$	15,896,017			$	30,927,295			$	33,931,050
COST OF SALES			10,716,337				12,944,941				25,528,678				26,959,377
GROSS PROFIT			1,889,007				2,951,076				5,398,617				6,971,673
OPERATING EXPENSES
Selling, general and administrative expenses			1,008,334				1,026,071				2,757,714				2,941,978
Depreciation and amortization			80,008				79,406				242,303				268,349
Wages and employee benefits			1,488,446				1,790,004				4,715,013				5,221,662
Total operating expenses			2,576,788				2,895,481				7,715,030				8,431,989
Income (loss) from operations			(687,781	)			55,595				(2,316,413	)			(1,460,316	)
OTHER ITEMS
Other income			—				—				306				2,450,000
Gain on sale of assets			—				1,450				800				90,537
Interest (expense) income			(74,147	)			(1,437	)			(43,053	)			11,527
Total other items			(74,147	)			13				(41,947	)			2,552,064
(Loss) income before income taxes			(761,928	)			55,608				(2,358,360	)			1,091,748
Income tax recovery (expense)			112,294				99,254				476,915				(179,491	)
Net (loss) income		$	(649,634	)		$	154,862			$	(1,881,445	)		$	912,257
Basic (loss) earnings per common share		$	(0.18	)		$	0.04			$	(0.54	)		$	0.26
Diluted (loss) earnings per common share		$	(0.18	)		$	0.04			$	(0.54	)		$	0.26
Weighted average number of common shares outstanding:
Basic			3,518,119				3,504,802				3,512,733				3,502,399
Diluted			3,518,119				3,504,802				3,512,733				3,502,399

The accompanying notes are an integral part of these consolidated financial statements.

4 

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)

			Capital Stock
			Number of Shares				Amount				Additional paid-in capital				Retained earnings				Total
August 31, 2023			3,498,899			$	825,468			$	765,055			$	22,506,804			$	24,097,327
Shares issued pursuant to compensation plans (note 9)			5,903				1,393				30,671				—				32,064
Net income			—				—				—				912,257				912,257
May 31, 2024			3,504,802			$	826,861			$	795,726			$	23,419,061			$	25,041,648
Net loss			—				—				—				(190,504	)			(190,504	)
August 31, 2024			3,504,802			$	826,861			$	795,726			$	23,228,557			$	24,851,144
Shares issued pursuant to compensation plans (note 9)			13,317				3,142				56,784				—				59,926
Net loss			—				—				—				(1,881,445	)			(1,881,445	)
May 31, 2025			3,518,119				830,003				852,510				21,347,112				23,029,625

The accompanying notes are an integral part of these consolidated financial statements.

5 

JEWETT-CAMERON TRADING COMPANY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. Dollars)

(Prepared by Management)

(Unaudited)

		Nine Month Period Ended May 31,
		2025				2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income		$	(1,881,445	)		$	912,257
Items not involving an outlay of cash:
Depreciation and amortization			242,303				268,349
Stock-based compensation expense			59,926				32,064
Gain on sale of assets			(800	)			(90,537	)
Write-down of intangible assets			—				21,790
Deferred income tax expense			(561,066	)			(76,913	)
Changes in non-cash working capital items:
Increase in accounts receivable			(3,120,767	)			(1,773,420	)
(Increase) decrease in inventory			(2,100,674	)			4,868,114
Decrease (increase) in prepaid expenses			186,242				(771,684	)
Increase (decrease) in accounts payable and accrued liabilities			1,133,160				(1,252,341	)
Decrease in prepaid income taxes			50,326				—
Increase in income taxes payable			14,426				96,479
Net cash provided by (used in) operating activities			(5,978,369	)			2,234,158
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on sale of property, plant and equipment			800				106,649
Purchase of property, plant and equipment			(93,384	)			(110,540	)
Net cash used in investing activities			(92,584	)			(3,891	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from (repayment to) bank indebtedness			2,422,305				(1,259,259	)
Net cash provided by (used in) financing activities			2,422,305				(1,259,259	)
Net (decrease) increase in cash and cash equivalents			(3,648,648	)			971,008
Cash and cash equivalents, beginning of period			4,853,367				83,696
Cash and cash equivalents, end of period		$	1,204,719			$	1,054,704

Supplemental disclosure with respect to cash flows (Note 13)

The accompanying notes are an integral part of these consolidated financial statements.

6 

JEWETT-CAMERON TRADING COMPANY LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

May 31, 2025

(Unaudited)

1.       NATURE OF OPERATIONS

Jewett-Cameron Trading Company Ltd. was incorporated in British Columbia on July 8, 1987 as a holding company for Jewett-Cameron Lumber Corporation (“JCLC”), incorporated September 1953. Jewett-Cameron Trading Company, Ltd. acquired all the shares of JCLC through a stock-for-stock exchange on July 13, 1987, and at that time JCLC became a wholly owned subsidiary. Effective September 1, 2013, the Company reorganized certain of its subsidiaries. JCLC’s name was changed to JC USA Inc. (“JC USA”), and a new subsidiary, Jewett-Cameron Company (“JCC”), was incorporated.

JC USA has the following wholly owned subsidiaries incorporated under the laws of the State of Oregon: Jewett-Cameron Seed Company, (“JCSC”), incorporated October 2000, Greenwood Products, Inc. (“Greenwood”), incorporated February 2002, and JCC, incorporated September 2013. Jewett-Cameron Trading Company Ltd. and its subsidiaries (the “Company”) have no significant assets in Canada.

The Company, through its subsidiaries, operates out of facilities located in North Plains, Oregon. JCC’s business consists of the manufacturing and distribution of pet, fencing and other products, wholesale distribution to home centers, other retailers, on-line as well as direct to end consumers located primarily in the United States. Greenwood is a processor and distributor of industrial wood and other specialty building products principally to customers in the marine and transportation industries in the United States. JCSC was a processor and distributor of agricultural seeds in the United States. JC USA provides professional and administrative services, including accounting and credit services, to its subsidiary companies.

Effective August 31, 2023, the Company ended seed cleaning operations at its JCSC. During the year ended August 31, 2024, JCSC ended its active operations and sold most of its remaining equipment in preparation of being wound-up.

The Company’s operations and general workforce can be negatively affected by a number of external factors. Examples include, but are not limited to, global health conditions and political conflict in other regions that may affect economies and financial markets globally. It is not possible for the Company to predict the duration or magnitude of adverse results of such external factors and their effect on the Company’s business, financial condition, or ability to raise funds.

2.       SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

These unaudited consolidated interim financial statements have been prepared in conformity with generally accepted accounting principles of the United States of America (“US GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC").

Principles of consolidation

These consolidated financial statements include the accounts of the Company and its current wholly owned subsidiaries, JC USA, JCC, JCSC, and Greenwood, all of which are incorporated under the laws of Oregon, U.S.A.

All inter-company balances and transactions have been eliminated upon consolidation.

7 

JEWETT-CAMERON TRADING COMPANY LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

May 31, 2025

(Unaudited)

 

2.       SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates incorporated into the Company’s consolidated financial statements include the estimated useful lives for depreciable and amortizable assets, the estimated allowances for doubtful accounts receivable and inventory obsolescence, possible product liability and possible product returns, and litigation contingencies and claims. Actual results could differ from those estimates.

Cash and cash equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. At May 31, 2025, cash and cash equivalents were $1,204,719 compared to $4,853,367 at August 31, 2024.

Accounts receivable

Trade and other accounts receivable are reported at face value less any provisions for uncollectible accounts considered necessary. Accounts receivable primarily includes trade receivables from customers. The Company estimates doubtful accounts on an item-by-item basis and includes over aged accounts as part of allowance for doubtful accounts, which are generally ones that are ninety days or greater overdue.

The Company extends credit to domestic customers and offers discounts for early payment. When extension of credit is not advisable, the Company relies on either prepayment or a letter of credit.

Inventory

Inventory, which consists primarily of finished goods, is recorded at the lower of cost, based on the average cost method, and market. Market is defined as net realizable value. An allowance for potential non-saleable inventory due to excess stock or obsolescence is based upon a review of inventory components.

Property, plant and equipment

Property, plant and equipment are recorded at cost less accumulated depreciation. The Company provides for depreciation over the estimated life of each asset on a straight-line basis over the following periods:

Schedule of estimated life of assets
Office equipment	3-7 years
Warehouse equipment	2-10 years
Buildings	5-30 years

Intangibles

The Company’s intangible assets have a finite life and are recorded at cost. Amortization is calculated using the straight-line method over the remaining life of the asset. The intangible assets are reviewed annually for impairment.

8 

JEWETT-CAMERON TRADING COMPANY LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

May 31, 2025

(Unaudited)

 

2.       SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Asset retirement obligations

The Company records the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and normal use of the long-lived assets. The Company also records a corresponding asset which is amortized over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each period to reflect the passage of time (accretion expense) and changes in the estimated future cash flows underlying the obligation (asset retirement cost). The Company does not have any significant asset retirement obligations.

Impairment of long-lived assets and long-lived assets to be disposed of

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount and the fair value less costs to sell.

Currency and foreign exchange

These financial statements are expressed in U.S. dollars which is also the functional currency of the Company and its subsidiaries as the Company's operations are primarily based in the United States.

The Company does not have non-monetary or monetary assets and liabilities that are in a currency other than the U.S. dollar. Any statement of operations transactions in a foreign currency are translated at rates that approximate those in effect at the time of translation. Gains and losses from translation of foreign currency transactions into U.S. dollars are included in current results of operations.

Earnings (loss) per share

Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding in the period. Diluted earnings (loss) per common share takes into consideration common shares outstanding (computed under basic earnings per share) and potentially dilutive common shares.

9 

JEWETT-CAMERON TRADING COMPANY LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

May 31, 2025

(Unaudited)

 

2.       SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Earnings (loss) per share (cont’d…)

The earnings (loss) for the three and nine month periods ended May 31, 2025 and 2024 are as follows:

Schedule of earnings (loss) per share
		Three Month Periods ended May 31,								Nine Month Periods ended May 31,
			2025				2024				2025				2023
Net (loss) income		$	(649,634	)		$	154,862			$	(1,881,445	)		$	912,257
Basic weighted average number of common shares outstanding			3,518,119				3,504,802				3,512,733				3,502,399
Effect of dilutive securities
Stock options			—				—				—				—
Diluted weighted average number of common shares outstanding			3,518,119				3,504,802				3,512,733				3,502,399

Comprehensive income (loss)

The Company has no items of other comprehensive income or loss in any period presented. Therefore, net income or loss presented in the consolidated statements of operations equals comprehensive income or loss.

Stock-based compensation

The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation - Stock Compensation” (“ASC 718”). Equity awards are accounted for at their “fair value” which is measured on the grant date for stock-settled awards. For “full-value” awards, fair value is equal to the underlying value of the stock that have time vesting conditions.  

Stock-based compensation to employees are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award. Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period, or in the period of grant for awards that vest immediately without any future service condition. For awards that vest over time, previously recognized compensation cost is reversed if the service or performance conditions are not satisfied and the award is forfeited. The Company also grants employees and non-employees restricted stock awards (“RSAs”). The fair value of the RSAs is determined using the fair value of the common shares on the date of the grant. Forfeitures are accounted for as they occur.

The Company has not adopted a stock option plan and has not granted any stock options.

10 

JEWETT-CAMERON TRADING COMPANY LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

May 31, 2025

(Unaudited)

 

2.       SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Financial instruments

The Company uses the following methods and assumptions to estimate the fair value of each class of financial instruments for which it is practicable to estimate such values:

Cash and cash equivalents - the carrying amount approximates fair value because the amounts consist of cash held at a bank and cash held in short term investment accounts.

Accounts receivable - the carrying amounts approximate fair value due to the short-term nature and historical collectability.

Bank indebtedness - the carrying amount approximates fair value due to the short-term nature of the obligations.

Accounts payable and accrued liabilities - the carrying amount approximates fair value due to the short-term nature of the obligations.

The estimated fair values of the Company's financial instruments as of May 31, 2025 and August 31, 2024 follows:

Schedule of estimated fair values
		May 31, 2025								August 31, 2024
			Carrying				Fair				Carrying				Fair
			Amount				Value				Amount				Value
Cash and cash equivalents		$	1,204,719			$	1,204,719			$	4,853,367			$	4,853,367
Accounts receivable, net of allowance			6,789,582				6,789,582				3,668,815				3,668,815
Bank indebtedness			2,422,305				2,422,305				—				—
Accounts payable and accrued liabilities			3,772,530				3,772,530				2,639,370				2,639,370

The following table presents information about the assets that are measured at fair value on a recurring basis as of May 31, 2025 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and included situations where there is little, if any, market activity for the asset:

Schedule of assets measured at fair value on a recurring basis
		May 31, 2025				Quoted Prices in Active Markets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents		$	1,204,719			$	1,204,719			$	—			$	—

The fair values of cash are determined through market, observable and corroborated sources.

11 

JEWETT-CAMERON TRADING COMPANY LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

May 31, 2025

(Unaudited)

 

2.        SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Income taxes

A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Shipping and handling costs

The Company incurs certain expenses related to preparing, packaging and shipping its products to its customers, mainly third-party transportation fees. All costs related to these activities are included as a component of cost of sales in the consolidated statements of operations. All costs billed to the customer are included as sales in the consolidated statements of operations.

Revenue recognition

The Company recognizes revenue from the sales of lumber, building supply products, industrial wood products, specialty metal products, and other specialty products and tools, when the products are shipped, title passes, and the ultimate collection is reasonably assured. Revenue from the Company's seed operations was generated from seed processing, handling and storage services provided to seed growers, and by the sales of seed products. Revenue from the provision of these services and products is recognized when the services have been performed, products are sold, and collection of the amounts is reasonably assured.

Recent Accounting Pronouncements

The Company has evaluated all recently issued, but not yet effective, accounting pronouncements and determined that it does not believe that any, if currently adopted, would have a material effect on the Company’s financial statements.

3.       INVENTORY

A summary of inventory is as follows:

Schedule of inventory
		May 31, 2025				August 31, 2024
Pet, fencing, and other products		$	14,418,442			$	12,407,495
Industrial wood products			839,475				749,748
Inventory net		$	15,257,917			$	13,157,243

12 

JEWETT-CAMERON TRADING COMPANY LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

May 31, 2025

(Unaudited)

 

4.       PROPERTY, PLANT AND EQUIPMENT

A summary of property, plant, and equipment is as follows:

Schedule of property, plant, and equipment
		May 31, 2025				August 31, 2024
Office equipment		$	681,260			$	668,260
Warehouse equipment			1,466,148				1,285,278
Buildings			5,211,588				5,211,588
Land			158,500				158,500
			7,517,496				7,323,626
Accumulated depreciation			(3,815,990	)			(3,473,826	)
Net book value		$	3,701,506			$	3,849,800

In the event that facts and circumstances indicate that the carrying amount of an asset may not be recoverable and an estimate of future discounted cash flows is less than the carrying amount of the asset, an impairment loss will be recognized. Management's estimates of revenues, operating expenses, and operating capital are subject to certain risks and uncertainties which may affect the recoverability of the Company's investments in its assets. Although management has made its best estimate of these factors based on current conditions, it is possible that changes could occur which could adversely affect management's estimate of the net cash flow expected to be generated from its operations.

In connection with the wind-up of the Company’s JCSC operations, the Company listed for sale in July 2024 its 11.6 acre property that formerly housed operations. The carrying value of this property of $566,022 is recorded as an asset held for sale as of May 31, 2025 (August 31, 2024 - $566,022).

5.       INTANGIBLE ASSETS

A summary of intangible assets is as follows:

Schedule of intangible assets
		May 31, 2025				August 31, 2024
Intangible assets			131,405				131,405
Accumulated amortization			(19,808	)			(19,183	)
Net book value		$	111,597			$	112,222

6.       DEFERRED INCOME TAXES

Deferred income tax asset as of May 31, 2025 of $902,095 (August 31, 2024 - $341,029) reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

13 

JEWETT-CAMERON TRADING COMPANY LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

May 31, 2025

(Unaudited)

 

7.        BANK INDEBTEDNESS

The Company has a line of credit agreement in the form of a Contract of Sale & Assignment Agreement with Northrim Funding Services (“Northrim”). Under the terms of the agreement, Northrim will provide short-term operating capital by either purchasing the Company’s accounts receivable invoices (“AR invoices”) or as a loan against the Company’s inventory position. The maximum amount of AR invoices Northrim will purchase at one time is limited to an amount equal to 80% of the net eligible accounts but is not to exceed $6,000,000. Borrowing against the Company’s inventory is computed as an amount equal to 25% of all eligible inventory but is not to exceed $4,000,000. The maximum total draw the Company may borrow under the line is $6,000,000. Interest is computed at the prime rate plus 4.75% with a floor of 11%, which as of May 31, 2025 was 12.25% (7.5 + 4.75%). Amounts borrowed under the line are secured by certain assets of the Company. The line renews on June 30, 2025. As of May 31, 2025, the Company’s indebtedness under the line of credit was $2,422,305 (August 31, 2024 - $Nil 0).

Prior to June 2024, the Company formerly had a different Bank Line of Credit of $5,000,000, which was reduced from $10,000,000 in March 2024. The line was secured by an assignment of accounts receivable and inventory. Calculation of the interest rate was based on the one-month Secured Overnight Financing Rate (SOFR) of the one-month SOFR plus 157 basis points, which as of May 31, 2024 was 6.89% (5.32% + 1.57%). All amounts borrowed under this former line were repaid in full during the first quarter of fiscal 2024, and indebtedness under the line as of May 31, 2024 was $Nil 0.

8.       CAPITAL STOCK

Common Stock

Holders of common stock are entitled to one vote for each share held. There are no restrictions that limit the Company's ability to pay dividends on its common stock. The Company has not declared any dividends since incorporation.

9.       RESTRICTED SHARE PLAN

The Company has a Restricted Share Plan (the “Plan”) as approved by shareholders on February 8, 2019. The Plan allows the Company to grant, from time to time, restricted shares as compensation to directors, officers, employees and consultants of the Company. The Restricted Shares are subject to restrictions, including the period under which the shares will be restricted (the “Restricted Period”) and subject to forfeiture which is determined by the Board at the time of the grant. The recipient of Restricted Shares is entitled to all of the rights of a shareholder, including the right to vote such shares and the right to receive any dividends, except that the shares granted under the Plan are nontransferable during the Restricted Period.

The Board of Directors has set the compensation for non-executive Directors under the Plan at 25 common shares for each quarter of service. The cumulative amount of shares earned each fiscal year to be granted shortly after the close of that fiscal year. Non-executive Directors also received a one-time initial grant of 225 common shares which were issued in December 2020.

The maximum number of Common Shares reserved for issuance under the Plan will not exceed 1% of the then issued and outstanding number of Common Shares at the time of the grant. As of May 31, 2025 the maximum number of shares available to be issued under the Plan was 16,072. In December 2024, the Company issued 13,317 common shares to officers, directors and employees under the Plan. The value of these shares was $59,926, which reduced the number of shares available under the Plan to 2,755 as at May 31, 2025.

14 

JEWETT-CAMERON TRADING COMPANY LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

May 31, 2025

(Unaudited)

 

9.       RESTRICTED SHARE PLAN (cont’d…)

On January 10, 2025, the Board of Directors approved and ratified a new restricted share plan, the 2024 Restricted Share Plan (The “2024 Plan”), which was also approved by the Company’s shareholders on February 21, 2025. The terms of the 2024 are similar to the original Plan and reserves the number of shares under the 2024 Plan to 1% of the issued and outstanding number of Common Shares at the time of the initial grant under the 2024 Plan. Pursuant to the 1% limit, the Company has reserved 35,181 shares under the 2024 Plan.

During the year ended August 31, 2023, 3,557 common shares were issued under the Plan at an average price of $6.55 per share. 500 shares were granted to Directors without a Restricted Period under the Company’s S-8 Registration Statement. 3,057 common shares were granted to Officers and Employees and have a three-year Restricted Period.

During the year ended August 31, 2024, 5,903 common shares were issued under the Plan at an average price of $5.43 per share. 575 were granted to Officers and Directors without a Restricted Period under the Company’s S-8 Registration Statement. 5,328 common shares were granted to Officers and Employees and have a three-year Restricted Period.

During the nine-month period ended May 31, 2025, the Company issued 13,317 common shares (nine months ended May 31, 2024 – 5,903 common shares) to officers, directors and employees under the RSA. The value of these shares was $59,926 (2024 - $32,064).

10.       PENSION AND PROFIT-SHARING PLANS

The Company has a deferred compensation 401(k) plan for all employees with at least 6 months of service pending a monthly enrollment time. The plan allows for a non-elective discretionary contribution plus matching employee contributions up to a specific limit. The percentages of contribution remain the discretion of the Board and are reviewed with management annually For the nine-month periods ended May 31, 2025 and 2024 the 401(k) compensation expense were $186,114 and $311,026, respectively.

11.       SEGMENT INFORMATION

The Company has four principal reportable segments. These reportable segments were determined based on the nature of the products offered. Reportable segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company evaluates performance based on several factors, of which the primary financial measure is business segment income before taxes. The following tables show the operations of the Company's reportable segments: Pet, Fencing and Other; Industrial wood products; Seed processing and sales; and Corporate and administration.

Following is a summary of segmented information for the nine-month periods ended May 31, 2025 and 2024.

Schedule of segmented information
		2025				2024
Sales to unaffiliated customers:
Industrial wood products		$	2,658,723			$	2,883,190
Lawn, garden, pet and other			28,268,572				30,964,142
Seed processing and sales			—				83,718
		$	30,927,295			$	33,931,050

15 

JEWETT-CAMERON TRADING COMPANY LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

May 31, 2025

(Unaudited)

 

11.       SEGMENT INFORMATION (cont’d…)

		2025				2024
(Loss) income before income taxes:
Industrial wood products		$	(68,148	)		$	41,146
Lawn, garden, pet and other			(2,615,470	)			384,102
Seed processing and sales			—				32,242
Corporate and administrative			325,258				634,258
		$	(2,358,360	)		$	1,091,748
Identifiable assets:
Industrial wood products		$	1,036,755			$	1,245,424
Lawn, garden, pet and other			20,745,342				20,452,800
Seed processing and sales			—				12,503
Corporate and administrative			7,456,789				6,617,076
		$	29,238,886			$	28,327,803
Depreciation and amortization:
Industrial wood products		$	—			$	—
Lawn, garden, pet and other			62,711				51,274
Seed processing and sales			—				1,615
Corporate and administrative			179,592				215,460
		$	242,303			$	268,349

The following table lists sales made by the Company to customers which were in excess of 10% of total sales for the nine months ended May 31, 2025 and 2024:

Schedule of sales
		2025				2024
Sales		$	22,891,391			$	22,653,269

The Company conducts business primarily in the United States, but also has limited amounts of sales in foreign countries. The following table lists sales by country for the nine months ended May 31, 2025 and 2024:

Schedule of sales by country
		2025				2024
United States		$	29,747,627			$	32,444,176
Canada			736,261				1,384,964
Mexico / Latin America / Caribbean			443,407				70,501
Europe			—				14,000
Middle East			—				17,409

All of the Company’s significant identifiable assets were located in the United States as of May 31, 2025 and 2024.

16 

JEWETT-CAMERON TRADING COMPANY LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

May 31, 2025

(Unaudited)

 

12.       RISKS

Credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company places its cash with a high quality financial institution. The Company has concentrations of credit risk with respect to accounts receivable as large amounts of its accounts receivable are concentrated geographically in the United States amongst a small number of customers.

At May 31, 2025, two customers accounted for accounts receivable greater than 10% of total accounts receivable at 78%. At May 31, 2024, two customers accounted for accounts receivable greater than 10% of total accounts receivable at 77%. The Company controls credit risk through credit approvals, credit limits, credit insurance and monitoring procedures. The Company performs credit evaluations of its commercial customers but generally does not require collateral to support accounts receivable.

Volume of business

The Company has concentrations in the volume of purchases it conducts with its suppliers. For the nine months ended May 31, 2025, there were four suppliers that each accounted for 10% or greater of total purchases, and the aggregate purchases amounted to $16,818,001. For the nine months ended May 31, 2024, there were three suppliers that each accounted for 10% or greater of total purchases, and the aggregate purchases amounted to $12,348,431.

13.       SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

Certain cash payments for the nine months ended May 31, 2025 and 2024 are summarized as follows:

Schedule of cash payments
		2025				2024
Cash paid during the periods for:
Interest		$	77,650			$	32,619
Income taxes		$	15,000			$	173,717

There were no non-cash investing or financing activities during the periods presented.

14.       CONTINGENCIES

In fiscal 2021, the Company initiated arbitration against a former distributor asserting a breach of the distribution agreement and seeking damages. In February 2023, the arbitrator issued its decision and ruled in favor of the Company on the majority of its claims. In September 2023, the Company settled the arbitration for a cash payment of $2,450,000 which was received by the Company in October 2023.

15.       SUBSEQUENT EVENT

In June 2025, the Company renewed its line of credit agreement with Northrim. The line now expires on June 30, 2026.

16 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

These unaudited financial statements are those of the Company and its wholly owned subsidiaries. In the opinion of management, the accompanying consolidated financial statements of Jewett-Cameron Trading Company Ltd., contain all adjustments, consisting only of normal recurring adjustments, necessary to fairly state its financial position as of May 31, 2025 and August 31, 2024 and its results of operations and cash flows for the three and nine month periods ended May 31, 2025 and 2024 in accordance with U.S. GAAP. Operating results for the three and nine month periods ended May 31, 2025 are not necessarily indicative of the results that may be experienced for the fiscal year ending August 31, 2025. Overall, the operating results of JCC are seasonal with the first two quarters of the fiscal year historically being slower than the final two quarters of the fiscal year.

Business Description

We are committed to improving the lives of professionals and do-it-yourselfers with innovative products that enrich outdoor spaces in their quality, performance, and ease to work with.

The Company’s operations are classified into three reportable operating segments and the parent corporate and administrative segment, which were determined based on the nature of the products offered along with the markets being served. The segments are as follows:

• Pet, Fencing and Other
• Industrial wood products
• Seed processing and sales
• Corporate and administration

Pet, Fencing and Other Operating Segment

We have concentrated on building a customer base for Pet, Fencing and our sustainable related products. Management believes these markets are less sensitive to downturns in the U.S. economy than the market for new home construction as its products serve both new and existing home and pet owners. However, the home improvement business is seasonal, with higher levels of sales occurring between February and August. Inventory buildup occurs until the start of the season in February and then gradually declines to seasonal low levels at the end of the summer.

Our wood products, distributed through JCC, are primarily cedar fencing and are not unique. However, Western Red Cedar, which historically has constituted the bulk of our wood fencing, can only be supplied in large volume from a limited number of suppliers and can experience supply shortages on occasion. Other cedar fencing, which serves as a substitute for Western Red Cedar, is more widely available from multiple suppliers. We are committed to find and secure these alternatives from other sources to compliment customer demand as well as offer consumers greater choice. The metal products that JCC manufactures and distributes may be somewhat differentiated from similar products available from other suppliers. We have been successful in garnering key patents and trademarks on multiple products that assist their ability to continue to differentiate based on design and functionality.

We own the patents and manufacturing rights connected with the Adjust-A-Gate® and Fit-Right® products, which are the gate support systems for wood, vinyl, chain link, and composite fences, in addition to our trade secret industry practices and well-known trademarked brands. We believe the ownership of these patents and trademarks is an important competitive advantage for these and certain other products. We completed our purchase of the full global trademark rights for Adjust-A-Gate® and filed its registration with the US Patent and Trademark Office in February 2023. As of the close of fiscal 2024, the Company owns 7 US Patents and 1 patent application pending in the US, Canada, and Mexico relating to its fencing products.

Backlog orders have typically not been a factor in this business as customers may place firm priced orders for products for shipments to take place three to four months in the future which gives us time to order, manufacture and receive the goods at our warehouse in time to fulfill the customer’s order.

17 

Industrial Wood Products - Greenwood

Greenwood is a wholesale distributor of a variety of specialty wood products. Current products are focused on the transportation industry. Greenwood’s total sales for fiscal 2024 and 2023 were 8% and 5%, respectively, of total Company sales.

The primary market in which Greenwood competes has decreased in economic sensitivity as users are incorporating products into the municipal and mass transit transportation sectors. However, these markets sustained some contractions in recent years due to COVID-19 as work shifted from offices to homes, and many individuals utilized public transit less due to concerns over exposure. In addition, this segment is prone to disruption of supply chain support which can impact other commodities outside of those specific to the disruption.

Greenwood utilizes contract manufacturers to supply its products. Inventory is maintained at non-owned warehouses and wood treating facilities throughout the United States and is primarily shipped to customers on a just-in-time basis. Inventory is generally not purchased on a speculative basis in anticipation of price changes as we order the products from the manufacturers and warehouses once a customer places an order with us.

Greenwood has no significant backlog of orders.

Seed Processing and Sales - JCSC

JCSC operated out of a Company-owned 11.6 acre facility located adjacent to North Plains, Oregon. JCSC processed and distributed agricultural seed. Most of this segment’s sales came from selling seed to distributors with a lesser amount of sales derived from cleaning seed.

We ended regular operations at JCSC effective August 31, 2023 and have sold all of our remaining seed inventory and are working to sell the remaining JCSC equipment. Seed storage operations continued through July, 2024.

In July 2024, we listed the JCSC property for sale or lease. The combined size of the buildings is approximately 109,500 square feet. One of the buildings is specialized for the seed industry, while most are metal warehouse buildings with power, allowing a wide array of possible uses. The property is currently zoned “Rural Industrial” (RIND), which allows for use of the existing property, or development of the site, as approved by Washington County. We are exploring the potential to re-zone the property, or revise the existing code, to expand the list of permitted uses. The listed sale price of the property is $9,000,000. This is the current asking price, and there is no guarantee the property will sell for this amount. If we are able to complete a sale, the net proceeds will be reduced by brokers’ commissions, expenses related to the sale, and taxes.

Corporate and Administration – JC USA

JC USA is the parent company for Greenwood, JCC and JCSC as described in Note 1 to Notes to Consolidated Financial Statements. JC USA operates out of our offices in North Plains, Oregon and provides professional and administrative services, including warehousing, accounting and credit services, to JCTC’s subsidiary companies.

Company Products

The Company’s mission is to improve the lives of professionals and do-it-yourselfers with innovative products that enrich outdoor spaces. We design, source, commercialize and distribute our products. Many are patent protected and all are well crafted for their quality, performance, and ease to work with.

The Fencing, Pet and Other businesses are conducted by JCC, which operates out of a 5.6 acre owned facility located in North Plains, Oregon that includes offices, a warehouse, and a paved yard. JCC uses contract manufacturers to make all products. Some of the products that JCC distributes flow through our distribution center located in North Plains, Oregon, and some are shipped direct to the customer from the manufacturer. Primary customers are home centers, eCommerce providers, other retailers, distributors, and direct sales to consumers.

The Industrial Wood Products segment is conducted by Greenwood, a processor and distributor that operates out of the same facilities in North Plains, Oregon. Greenwood contracts with custom manufacturers for its products. Inventory is maintained at non-owned warehouses and wood treating facilities throughout the United States and is primarily shipped to customers on a just-in-time basis.

18 

Fencing Products

Our fencing business crafts durable, functional fencing solutions that bolster security, privacy, and beauty. Our primary products include:

• The Adjust-A-Gate® family of products are straightforward, lifelong solutions that eliminate measurement issues. Complete steel frame gate kits to perfectly fit openings for wood fences and never sag. Easy enough for homeowners, but with superior quality that meets the demands of the professional contractor.

• Fit-Right® is a fully adjustable gate system for chain link gates. This custom solution is perfect for when a special sized chain link gate opening is needed. Equipped with all the necessary parts, building a gate on-site eliminates measurement issues for the right fit the first time and every time.

• Lifetime Steel Post® offers unmatched strength and versatility in fencing. This post offers versatile support for a range of fence designs and styles, allowing flexibility to showcase the posts or keep them discreetly hidden.

• Euro Fence offers the beauty of wood without the upkeep, featuring durable wood/plastic composite materials. With locking tongue & groove composite and aluminum boards, it provides UV protection, never needs paint or stain, and installs easily in-ground or mounted.

• Perimeter Patrol® Portable Security Panels create an enclosed space or linear fence for outdoor areas. Perfect for crowd control, job site security, outdoor events, enclosed storage areas and more.

• Cedar fencing is a premium softwood known for its unique blend of beauty and durability. Its natural resistance to decay enhances its longevity, while its ease of cutting, sawing, and nailing with standard tools makes it a preferred choice for versatile applications.

Pet Products

Our Lucky Dog® brand is dedicated to keeping pets safe and happy with exceptional quality, long-lasting products that put your pet first. Our primary pet products are:

• Lucky Dog® STAY Series Studio Kennels built with long-lasting steel frames and powder coated finish. The waterproof polyester cover offers UPF 50+ protection and is designed for ultimate comfort.

• Lucky Dog® Outdoor Kennel Covers provide durable, waterproof protection with UPF 50+ sun defense. Designed for year-round comfort, they fit securely over Lucky Dog® Kennels.

• Lucky Dog® Dwell Series® Crates offers peace of mind with secure latches, rust-resistant E-coating along with a patented sliding side door and patented corner stabilizers. With a top handle for easy transport and a divider panel for flexible space, they offer durability and convenience.

• Lucky Dog® Exercise Pens provide a secure space for pets with sturdy, rust-resistant wire construction. Featuring a step-thru door, tool-free setup, and fold-flat design for easy storage, these pens are perfect for both indoor and outdoor use.

Sustainable Products

Our newest product category is Sustainable and Post-Consumer Recycled (“PCR”) bag products. Sold under the MyEcoWorld® brand, it is making a tangible, positive difference to the planet by working to reduce conventional single-use plastic in our daily lives.

We offer two types of bag products. The Compostable bags are made with 30% corn. The PCR Products are certified to the Global Recycled Standard (GRS) to contain recycled material that has been independently verified at each stage of the supply chain, from the source to the final product, and cost less than compostable bags.

Our primary Sustainable Products are:

• Food Waste Bags that are certified compostable and worm-safe. These durable bags offer puncture resistance, odor control, and pest deterrence, ensuring reliable use and a cleaner kitchen environment.

• Yard Waste Bags that are suitable for a variety of composting methods, including home, curbside pickup, and industrial composting facilities.

• Pet Poop Bags that ensure no breaks or leaks while keeping the user’s hands clean.

Industrial Wood Products

Greenwood Products specializes in engineering advanced noise and vibration reduction panels for transit buses, motor coaches, light rail cars, and boats. Our dB-Ply® proprietary acoustical panel is a cost-effective product designed to reduce vibration and sound transmission to meet mandated interior noise requirements. Greenwood’s other products include durable, high-performance structural panels tailored for a wide range of industrial applications, and Jumbo Concrete Forms designed to reduce installation time and lower job-site labor costs.

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Seed Segment

The Company formerly operated agricultural seed processing, distribution and sales through JCSC. Most of this segment’s sales were derived from selling seed to distributors with a lesser amount of sales derived from cleaning seed. During the fiscal year ended August 31, 2023, the Company decided to close its JCSC seed subsidiary effective August 31, 2023. JCSC has now been wound up and all remaining assets have been transferred to JC USA.

Results of Operations

Our results in the 3^rd quarter was challenging, as the turmoil over the higher tariffs and certain operational issues significantly reduced our revenues, and negatively impacted our margins and operating results. Sales for the current 3^rd quarter declined by 21% from the prior year’s 3^rd quarter, and we had a net loss of ($0.18) per share.

Currently, the most significant factor affecting our business is the new US tariffs, primarily on our imported metal products. The rapid and unpredictable changes to rates, products, and which countries are affected have caused immense turmoil in our markets including stressing key logistics lines and increasing costs. This has resulted in significantly higher pricing and uncertainty in deliveries to customers. Tariffs on Chinese goods were originally subject to a 25% tariff implemented in 2019. Additional China specific tariffs were added in February, March, and April, with further increases announced in May. The diversification of our suppliers to additional countries beyond China successfully allowed us to initially mitigate some of the recent tariff increases as those new suppliers outside of China were primarily subject only to the universal 10% baseline tariff rate as a floor. However, some nations have been notified of possible other country specific tariffs subject to negotiation. Steel and aluminum imports were originally assigned a global 25% tariff rate. Subsequently, that rate was doubled to 50% as of June 4^th, just five days after it was announced on May 30^th leaving us and other importers with no time to plan or adjust import shipments.

As a result of the frequent and unpredictable rate changes, and the indications of further significant increases, many retailers and consumers have deferred purchases of imported metal products until further clarity on prices is available. We have made strenuous efforts to adjust our selling prices to correctly reflect the new tariff rates, but the rapid and unpredictable announcements of new rates over the last 6 months have made that process extremely difficult. It takes time to compute the new prices, communicate that to the customer, and have them accept them for future shipments. Because the rates have changed frequently, many of our new prices have become obsolete before they were able to take effect. Therefore, it has caused our customers to pause their purchasing until they receive greater certainty on tariffs, as they are reluctant to make long-term purchases at contracted prices that may decline based on the rapidly changing tariff rates.

The current trade negotiations occurring between the US and multiple nations to set country specific tariff rates provides optimism that clarity on final rates may be forthcoming. We have consulted with experts and legal counsel to accurately interpret how to properly apply the rates to our products to ensure compliance and to make sure our prices remain cost competitive. Although consumers will eventually adjust their buying to accept higher prices over time, it will likely continue to dampen demand in the short-term until consumers and retailers become more accepting of the higher prices. These increased costs will likely continue to negatively affect our margins and demand for certain of our products in the short term.

Our rollout of Lifetime Steel Posts® (“LTP”) displayers continued in the 3^rd quarter, and sales of the product were up 85% compared to the third quarter of fiscal 2024. 55 new display units were deployed through the end of May. However, we have temporarily paused adding new display units to prioritize our existing inventory to support existing display replenishment demand. We are actively managing production capacity constraints and logistical issues from new factories outside of China which naturally impacted our previous schedule of deliveries designed to support continued displayer expansion efforts. The higher tariff rates on Chinese goods caused many US companies to quickly shift production to other nations, and the available logistic infrastructure in these other countries has been overtaxed by the rapid increase in production and shipping demands. Once the logistic issues have been corrected, we expect to resume the placement expansion of the in-store display units.

We experienced an interruption to our ability to fulfill our cedar fencing orders during the current 3^rd quarter. It is customary to purchase ample supply ahead of the increase in demand each Spring, but this year we failed to acquire an adequate supply to meet our actual demand. As a result, we were unable to fulfill all our customers’ orders, and our wood fencing sales were down 33% in the third quarter. We have now moved quickly to aggressively secure additional Western Red Cedar from our supply partners. We are on track to meet all demand in July and we are well positioned to support this program through the remainder of the calendar year. We have also implemented important process changes to prevent shortages like this in the future.

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The pet market remains very soft. The anticipated rebound in consumer demand has not yet materialized and retailers remain burdened with high inventory levels. The one recent exception has been in our dog bowls, which have been selling well. We maintain available inventory in our warehouse of pre-tariff metal crates and kennels which may offer a price advantage to newly imported products. We are exploring ways to reduce our inventory levels of these larger pet products. This may involve short-term price reductions which could reduce our margins on these products but will help clear older inventory from our warehouse.

MyEcoWorld® sales for the current nine months are up 265% over the comparative period in fiscal 2024 as consumers continue to look for high quality sustainable products as alternatives to disposable traditional single-use plastics. Some of this increase is due to shifting our entire LuckyDog® compostable dog waste bag line to a new MyEcoWorld® product. One part of our growth strategy for this line has been entering the grocery store segment, and we secured our first placement with the launch of Pet Waste Bags into 59 Tops Friendly Markets across the Northeast beginning in late February. However, the recent increase in tariffs on these products have made growth in the grocery segment much more challenging. We will continue to focus on expanding upon our successful introductions into big box stores where we have existing strong supplier relationships, and into foreign markets that are unburdened by the new US tariffs. We have been receiving strong demand from big box stores in Mexico where the lack of US tariffs has made the product very competitive.

At Greenwood, sales for the current nine-month period were down slightly compared to the year-ago period as a seat shortage has slowed production across the bus industry. Sales in the prior nine months were buoyed by transit operators buying components to catch up on fleet maintenance they deferred during the pandemic. We believe this segment has significant growth potential in both our primary transit sector and in new markets, such as construction. However, possible new tariffs on Canadian wood products could raise prices for our raw materials in future periods.

During the 3^rd quarter, we continued our strategy to analyze and implement operational efficiencies in all aspects of our business. We have shifted some employees to better align our workforce with our strategic direction, while adding some employees in specific roles, including sales. Overall, we have reduced our employee headcount by 33% year-to-date. We have also evaluated and commenced the planning and implementation of upgraded technology in warehouse operations to expedite receiving, cycle counting and shipping activities. These changes will result in increased productivity and reduce our costs without compromising quality or service.

The surplus Jewett-Cameron Seed property of 11.6 acres of land and 109,500 square feet of buildings remains listed for sale at a price of $9,000,000. This is the current asking price and there is no guarantee the property will sell for this amount. The land is currently zoned with a rural industrial classification but is well situated on a corner lot at a major interchange immediately adjacent to US Highway 26, which is one of the region’s busiest roadways. We have explored the potential rezoning of the property to other permitted uses, including the inclusion within any expanded Urban Growth Boundaries (UGB). The current economic struggles of both the nearby cities and within greater Portland has reduced the previously perceived need among the nearby cities to quickly expand the UGB, including extending the boundary toward the area containing JCSC property. Therefore, any inclusion of the property in expanded UGBs or reclassification of the property from its limited rural industrial classification now appears unlikely among the prevailing economic and political environment. This could be discouraging potential buyers who may have been interested in the property for other uses and will likely impact our potential sale and sales price. We continue to have meaningful discussions with interested parties. Currently there is no firm agreement for a sale in place and the property remains on the market.

We anticipate that many of the challenges we experienced in the 3^rd quarter will extend into our 4^th quarter. The frequently changing tariff rates are continuing to cause hesitation and uncertainly among both retailers and consumers, and we expect this will continue until those rates are finalized and buyers can accurately estimate costs. Besides the tariff disruptions, consumer sentiment and economic conditions remain depressed due to stubborn inflation, high interest rates, and employment concerns. Our orders remain sluggish, and we expect to record a loss in the 4^th quarter and for the full year.

We intend to continue to work to improve our operational efficiencies, further develop our multi-sourcing strategy, and resolve the logistical impediments to reduce our costs and better serve our customers.

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Three Months Ended May 31, 2025 and May 31, 2024

For the three months ended May 31, 2025, sales totaled $12,605,344 compared to sales of $15,896,017 for the three months ended May 31, 2024, which is a decrease of $3,290,673, or 21%. The uncertainty and cost increases due to the changing tariff rates and our shortage in fencing contributed to the decline.

Sales at JCC were $11,900,284 compared to sales of $14,957,204 for the quarter ended May 31, 2024, a decrease of $3,056,920, or 20%. Operating loss for JCC for the quarter ended May 31, 2025 was ($861,105) compared to a loss of ($67,000) for the quarter ended May 31, 2024. Pet sales remained weak, and shortages in our cedar supply resulted in lower fencing sales. Our metal products were severely affected by the uncertainty around the higher tariff rates, which caused customers to pause buying during the quarter.

Sales at Greenwood for the quarter were $705,059 compared to sales of $924,767 for the three months ended May 31, 2024, which was a decrease of $219,708 or 24%. In the current period, a seat supply issue slowed production across the bus industry, which especially impacted our largest customer. Sales in the prior year’s quarter were boosted by higher demand by municipalities and transit operators catching up on deferred vehicle maintenance post-pandemic. The seat supply issues are now resolving which is expected to strengthen bus construction in the months to come. For the three months ended May 31, 2025, Greenwood had an operating loss of ($20,283) compared to an operating loss of ($237) for the three months ended May 31, 2024.

JCSC operations were permanently closed as of December 31, 2023, and storage activity ended in July 2024. Therefore, there were no revenue from JCSC compared to sales of $14,046 for the three months ended May 31, 2024.

JC USA is the holding company for the wholly-owned operating subsidiaries. For the quarter ended May 31, 2025, JC USA had income before income taxes of $119,460 compared to operating income of $128,995 for the quarter ended May 31, 2024. The results of JC USA are eliminated on consolidation.

Gross margin for the three months ended May 31, 2025 was 15.0% compared to 18.6% for the three months ended May 31, 2024. Current margins declined due to higher shipping costs, expenditures on the continued roll-out of in-store display units, and a shift towards lower margin products during the quarter.

Operating expenses for the three months ended May 31, 2025 were $2,576,788, which was a decrease of $318,693 from expenses of $2,895,481 in the three months ended May 31, 2024. Wages and employee benefits declined to $1,488,446 from $1,790,004 as we reduced our employee headcount by 20% in May 2025. Selling, General and Administrative expenses were down slightly at $1,008,334 compared to $1,026,071. Depreciation increased to $80,008 from $79,406. There was no gain on the sale of assets in the current quarter compared to $1,450 in the period ended May 31, 2024. Interest expense was ($74,147) compared to expense of ($1,437) due to borrowing against the line of credit in the current quarter.

Income tax recovery for the three months ended May 31, 2025 was $112,294 compared to recovery of $99,254 for the three-month period ended May 31, 2024. The Company estimates income tax expense for the quarter based on combined federal and state rates that are currently in effect.

Net loss for the quarter ended May 31, 2025 was ($649,634), or ($0.18) per basic and diluted share, compared to net income of $154,862, or $0.04 per basic and diluted share, for the quarter ended May 31, 2024.

Nine Months Ended May 31, 2025 and May 31, 2024

For the nine months ended May 31, 2025, sales totaled $30,927,295 compared to sales of $33,931,050 for the nine months ended May 31, 2024, which is a decrease of $3,003,755, or 9%. Consumers have continued to restrain their discretionary spending, particularly on home improvement and pet goods. For the first six months of the period, our sales were relatively flat year-over-year. However, during the third quarter, the rapid and unpredictable increases in tariff rates, particularly on imported steel and aluminum products, caused retailers and consumers to pause their purchases and impacted margins due to tariff driven product re-pricings and delayed customer acceptance.

Sales at JCC were $28,268,572 for the nine months ended May 31, 2025 compared to sales of $30,964,142 for the nine months ended May 31, 2024, which is a decrease of $2,695,570, or 9%. Revenue from our pet lines remains weak while shortages of our supply for cedar restrained our wood fencing revenues. Sales were also negatively impacted during the current 2^nd and 3^rd quarters by the increased tariff rates, particularly on imported steel and aluminum products. For the current nine-month period, JCC had an operating loss of ($2,615,470) compared to income of $384,102 for the nine months ended May 31, 2024.

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Sales at Greenwood were $2,658,723 for the current nine months compared to sales of $2,883,190 for the nine months ended May 31, 2024. This represents a decrease of $224,467, or 8%. Sales in the current period were negatively impacted by a seat shortage which reduced new bus construction, while sales in the prior year’s period were boosted by higher demand by municipalities and transit operators catching up on deferred vehicle maintenance post-pandemic. We have realigned some personnel to Greenwood to support our efforts to increase sales by opening new sales channels and adding customers, both within the transit sector and in new sectors such as construction. For the nine months ended May 31, 2025, Greenwood had an operating loss of ($68,148) compared to operating income of $41,146 for the nine months ended May 31, 2024.

JCSC operations were permanently closed as of December 31, 2023, and storage activity ended in July 2024. Therefore, there was no revenue or income from JCSC in the current nine-month period compared to revenue of $83,718 and operating income of $32,242 for nine months ended May 31, 2024.

JC USA, the holding company that provides professional and administrative services for the wholly-owned operating subsidiaries had operating income of $325,258 for the nine months ended May 31, 2025 compared to operating income of $634,257 for the nine months ended May 31, 2024. The results of JC USA are eliminated on consolidation.

Gross margin for the nine-month period ended May 31, 2025 was 17.5% compared to 20.5% for the nine months ended May 31, 2024. Current margins were negatively affected by higher logistics and ocean shipping costs, our investment in the new in-store fencing product display units, and a shift to lower margin products.

Operating expenses declined to $7,715,030 from expenses of $8,431,989 for the nine months ended May 31, 2024. Selling, General and Administrative expenses fell to $2,757,714 from $2,941,978. Wages and Employee Benefits declined to $4,715,013 from $5,221,662 due to the lower headcount in the current period. Depreciation and amortization declined to $242,303 from $268,349.

Other items recorded in the current nine-month period include other income of $306, and a gain on sale of assets of $800. We also recorded interest expense of ($43,053) which was primarily due to interest on borrowings against our line of credit. In the prior nine months, the Company successfully settled its arbitration case against one of its former distributors for a cash payment of $2,450,000 which was accounted for as other income. The prior year’s period also had a gain on sale of assets of $90,537, which largely is due to the sale of JCSC equipment, and net interest income of $11,527.

Income tax recovery in the current nine-month period was $476,915 compared to income tax expense of ($179,491) in the prior nine-month period ended May 31, 2024. The Company estimates income tax expense for the period based on combined federal and state rates that are currently in effect.

Net loss for the nine months ended May 31, 2025 was ($1,881,445), or ($0.54) per basic and diluted share, compared to net income of $912,257, or $0.26 per basic and diluted share, for the nine months ended May 31, 2024.

LIQUIDITY AND CAPITAL RESOURCES

As of May 31, 2025, the Company had working capital of $18,314,427 compared to working capital of $20,548,093 as of August 31, 2024, a decrease of $2,233,666.

Cash and cash equivalents totaled $1,204,719, a decrease of $3,648,648 from cash of $4,853,367 as of August 31, 2024. The decrease was due to the purchase of inventory for the busier Spring and Summer seasons, which rose to $15,257,917 from $13,157,243, the timing of collection of accounts receivable, which increased to $6,789,582 from $3,668,815, and prepaid expenses, which are largely related to down payments for future inventory purchases, which was $705,448 compared to $891,690. Prepaid income taxes was $Nil, which declined from $50,326 in the period ended May 31, 2024.

Asset held for sale was unchanged at $566,022. This asset is the 11.6 acres of land and 109,500 square feet of buildings which formerly housed JCSC operations and is publicly listed for sale.

Current liabilities increased to $6,209,261 from $2,639,370. Accounts payable increased to $1,861,519 from $1,237,988, and accrued liabilities increased to $1,911,011 from $1,401,382. Bank indebtedness as of May 31, 2025 was $2,422,305 which was the amounts drawn against the Company’s line of credit.

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As of May 31, 2025, accounts receivable and inventory represented 90% of current assets and 75% of total assets compared to 73% of current assets and 61% of total assets as of August 31, 2024. For the three months ended May 31, 2025, the accounts receivable collection period, or DSO, was 50 compared to 43 for the three months ended May 31, 2024. For the nine-month period ended May 31, 2025, the DSO was 60 compared to 60 for the nine months ended May 31, 2024. Inventory turnover for the three months ended May 31, 2025 was 129 days compared to 110 days for the three months ended May 31, 2024. For the nine months ended May 31, 2025, inventory turnover was 152 days compared to 162 days for the nine months ended May 31, 2024.

External sources of liquidity include an asset-based line of credit agreement with Northrim Funding Services (“Northrim”) which we established in fiscal 2024. Under the terms of the agreement, Northrim will provide short-term operating capital by either purchasing the Company’s accounts receivable invoices (“AR invoices”) or as a loan against our inventory position. The maximum amount of AR invoices Northrim will purchase at one time is limited to an amount equal to 80% of the net eligible accounts but is not to exceed $6,000,000. Borrowing against our inventory is computed as an amount equal to 25% of all eligible inventory but is not to exceed $4,000,000. The maximum total draw the Company may borrow under the line is $6,000,000. Interest is computed at the prime rate plus 4.75% with floor of 11%, and is secured by certain of our assets. In March 2025 the Company drew its initial borrowings against this line. As of the end of the most recent fiscal quarter on May 31, 2025, the Company has drawn $2,422,305 against this line of credit at a current interest rate of 12.25% to fund inventory purchases to meet expected demand ahead of our historically busy sales season of Spring and Summer. In June 2025, we successfully renewed the line with Northrim and it now expires on June 30, 2026.

During the nine months ended May 31, 2025, the Company issued 13,317 common shares to officers, directors and employees under the Restricted Share Plan. The value of these shares was $59,926.

Current Working Capital Requirements

Based on the Company’s current working capital position, combined with the expected timing of accounts receivable and the capital available under our Line of Credit, the Company is expected to have sufficient liquidity available to meet the Company’s working capital requirements for the next twelve months.

OTHER MATTERS

Tariffs

Our metal and other products have historically been mostly manufactured in China and are imported into the United States. Beginning in 2018, the Office of the United States Trade Representative (“USTR”) instituted new tariffs on the importation of a number of products into the United States from China. These initial tariffs were a response to what the USTR considers to be certain unfair trade practices by China. The tariffs began at 10%, and subsequently were increased to 25% as of May 2019.

Prior to fiscal 2024, our metal products were primarily manufactured in China and subject to the full 25% tariff rate. During fiscal 2024, we engaged suppliers in countries outside of China, including Bangladesh, Vietnam, Malaysia, Taiwan, and Canada. Products manufactured in and imported from these countries were not subject to the China-specific tariffs, but were subject to other duties and fees that are typically much lower than the then 25% tariff on Chinese manufactured metal products.

Beginning in January 2025, the new Presidential administration in the United States began to increase tariff rates on numerous products from a range of nations. Imported steel and aluminum products from all countries globally were assigned a new tariff rate of 25% on top of any country or product specific rates. In early April 2025, the US imposed a universal baseline 10% tariff rate on imports globally along with a list of product exemptions. As of June 4, 2025, the tariff on steel and aluminum imports was raised to 50%. The current schedules exempt steel and aluminum products which are subject to the 50% global steel and aluminum tariff from the 10% universal baseline tariff and from any reciprocal tariffs. Therefore, our steel products imported from countries other than China are subject to only the 50% rate. China, however, has been assigned special rates. Tariff rates on steel products imported from China were at 95% as of the June 4, 2025, consisting of the 2019 tariff of 25%, February 2025 tariff of 10%, March 2025 tariff of 10%, with the additional 50% steel and aluminum tariff.

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We are continuing our shift to suppliers outside of China which have lower tariff rates. We also face uncertainty in the interpretation of new tariffs and their applicability, including with respect to customs valuation, product classification and country-of-origin determinations. Although we and our suppliers seek to comply with applicable customs laws and regulations, the application of rules regarding new tariffs can be subject to varying interpretations or future re-interpretations. It is possible that US or other relevant authorities could, upon review or audit, disagree with the valuation, rules of origin or classification methods applied to certain products. Any such disagreement could result in the retroactive assessment of additional duties with interest, the imposition of penalties, or other enforcement actions without the ability to mitigate such penalties, thereby adversely affecting our operations or financial results. Furthermore, certain of our competitors may be better positioned than us to withstand or react to border taxes, tariffs or other restrictions on global trade and as a result, we may lose market share to such competitors. Due to broad uncertainty regarding the timing, content and extent of any regulatory changes in the U.S. or abroad, we cannot predict with certainty the impact, if any, that these changes could have to our business, financial condition and results of operations. 

Inflation

Since fiscal 2021, a number of product costs have increased substantially, including raw materials, energy, and transportation/logistical related costs. These higher costs have negatively affected our gross margins. Historically, we have passed cost increases on to the customer, but the rapid rise of prices over the last several years has resulted in consumers significantly reducing discretionary spending which has made the market much more price sensitive. This has made retailers more reluctant to accept higher prices for our goods which has limited our ability to raise our selling prices quickly enough to match the rate of increase of our costs. Our ability to pass through all of the current increase in our product costs to our customers is somewhat limited and occur after such costs are first incurred. Although management is working to mitigate such cost increases through the new sourcing agreements and modifying logistic agreements, we expect that our gross margins will remain under pressure in fiscal 2025.

The increases in interest rates as a result of the higher level of inflation in the US economy experienced beginning in calendar 2021 and continuing through 2024 has also had a negative effect on our interest expense charged on any borrowing on our lines of credit. The interest rate on our current line of credit is computed using the Prime Interest Rate, which has risen from 3.25% in January 2022 to approximately 7.50% in February 2025. There were no amounts outstanding under this line of credit as of February 28, 2025. However, beginning on March 7, 2025, the Company began drawing against its asset-based line of credit to fund its usual seasonal build of inventory to meet its anticipated needs for the busier Spring and Summer seasons. As of the end of the most recent fiscal quarter on May 31, 2025, the Company has drawn $2,422,305 against this line of credit at a current interest rate of 12.25%.

Environmental, Social and Corporate Governance (ESG)

Jewett-Cameron endeavors to be a good steward and provide sustainable products with a positive impact. We strive to operate and grow in a way that honors our environment and relationships for the long term. This also aligns with one of our three value pillars: stewardship.

Environmental

For our products, the goal is that 90% of materials can be recycled. Our suppliers are audited to strict commercial and fair practice standards, including our own supplier qualifications regarding facilities, capacity, labor practices, and environmental awareness. Packaging is designed to maximize recyclability and re-use and minimize non-recycled materials, and all waste materials in our own facilities are segregated to maximize recycling. Our facilities have replaced high energy consumption infrastructure with energy efficient HVAC and lighting during our most recent remodel.

Active products and designs utilize either recycled or non-petroleum-based plastics to enhance recycling and composting. This includes the recently introduced compostable dog waste bag, a plant-based product, that is less reliant on fossil fuels used in traditional plastic bags. We also dedicate a percentage of sales to support environmental cleanup efforts.

Social

Our social responsibilities include cultural standards of operations and values which we establish in conjunction with our employees. We regularly provide employees with a corporate engagement survey to benchmark their engagement, satisfaction, and ideas for change. We support educational programs that build the future workforce through active participation in regional and statewide organizations, including the CTE/STEM Employer Coalition and assisting teachers to connect traditional school subjects to practical job site applications. We also actively participate in the local community, supported by a Corporate Charitable Giving Charter.

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Governance

As a public company, our processes are outlined and governed by multiple regulations, including the Sarbanes-Oxley Act of 2002. Our financial controls are mapped, executed, self-audited as well as regularly audited by outside experts as part of our annual process. We have established risk mitigations that allows for condensed reviews of risks and impacts with our systems in place. An IT Governance Committee aligns execution and security both for ourselves and also for parties with whom we communicate and do business.

Uyghur Forced Labor Prevention Act

The Uyghur Forced Labor Prevention Act (“UFLPA”) is a US Federal Law signed by President Biden in December 2021 which became effective on June 21, 2022. As enforced by U.S. Customs and Border Protection, the UFLPA prohibits any products that are made, mined, or manufactured, in part or in full, in China’s Xinjiang Uyghur Autonomous Region to be imported into the United States, as they are presumed to have been made with forced labor. Any imports of such goods will be detained and seized by U.S. Customs unless the importer is able to prove that these goods have not been made with forced labor. The Company has ensured that each of its suppliers is in full compliance with the law and none of its products fall under the prohibited goods clause.

Business Risks

This quarterly report includes “forward–looking statements” as that term is defined in Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “anticipates,” or “hopeful,” or the negative of those terms or other comparable terminology, or by discussions of strategy, plans or intentions. For example, this section contains numerous forward-looking statements. All forward-looking statements in this report are made based on management’s current expectations and estimates, which involve risks and uncertainties, including those described in the following paragraphs.

Risks Related to Our Business

We could experience a decrease in the demand for our products resulting in lower sales volumes.

In the past we have at times experienced decreasing products sales with certain customers. The reasons for this can be generally attributed to: increased competition; general economic conditions; demand for products; and consumer interest rates. If economic conditions deteriorate or if consumer preferences change, we could experience a significant decrease in profitability.

We are dependent on our a limited number of customers for the majority of our sales of products and our ability to retain and expand our relationships with such clients.

Historically, a significant percentage of our revenue has come from a limited number of customers. For example, for the nine months ended May 31, 2025, our top ten customers represented 98% of our total sales, and our single largest customer was responsible for 38% of our total sales. We would experience a significant decrease in sales and profitability and would have to cut back our operations if any of these customers were lost and could not be replaced. Our top ten customers are located in North America and are primarily in the retail home improvement and pet industries.

We generally have to qualify, and are required to maintain our status, as a supplier for each of our larger retail home improvement customers. A significant failure or an inability to comply with customer specifications and manufacturing and import requirements or delays or other problems with existing or new products or inability to meet price requirements could result in cancelled orders, increased costs, loss of sales, market share shift, loss of customers or potential breaches of contracts, which could have an adverse effect on our profitability and results of operations. By virtue of certain customers’ size and the significant portion of revenue that we derive from them, they can exert significant influence in the negotiation of our commercial agreements and the conduct of our business with them which could adversely affect our profitability.

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Our business, in large part, depends on relationships our teams develop with our customers so that we can understand their needs and deliver product solutions and processes that are tailored to those needs. If a large customer is not satisfied with our performance or the relationship becomes significantly damaged, we could incur additional costs to address the situation, our profitability might be impaired, and the customers dissatisfaction could damage our ability to continue to do business with that customer. Further, large retail customers have significant leverage over us and if they are not satisfied with our products or support might claim breach of existing contracts, seek to terminate existing contracts, or impose significant restrictions or conditions on our business relationship with them, which would have a material adverse effect on our business, profitability and financial condition.

We have no manufacturing capabilities for our products, and we are dependent upon third parties to supply the materials for, and to manufacture, our products, which creates risks relating to increased costs, manufacturing and shipping delays, and potential increased costs due to circumstances beyond our control.

We do not own or operate, and currently do not plan to own or operate, facilities for production and packaging of our products. We rely and expect to continue to rely on third parties for the production and packaging, of our products. While we are no longer dependent on a single source for our primary products, and we now have multiple sources of supply, the current geopolitical and economic environment has created significant uncertainty with regard to costs, particularly with respect to the fluid and volatile tariff situation relating to countries from which we source our products. Further, certain of our larger customers have unique criteria that must be adhered to with respect to the import of our products to their facilities. Any failure by us or our suppliers to satisfy our customers’ import requirements may result in decreased product sales and lower product revenue, which would harm our business. Similarly, if the foreign ports of embarkation of our products are not approved by our customers, we would have to locate alternative means of shipping through approved ports or our suppliers would be required to submit to a process in order to obtain such approval, which would add significant supply costs and reduce our product margins for such shipments.

Our reliance on third-party manufacturers and suppliers subjects us to risks associated with their businesses and operations. For example, even if we have agreements with third parties, they may not perform their obligations to us and/or they may be unable or unwilling to establish or increase production capacity commensurate with our needs. Also, third-party manufacturers and suppliers are subject to their own operational and financial risks that are outside of our control, and potentially their control also, that may cause them to suffer liquidity or operational problems and that could interfere with their business operations. For example, their operations and/or ability to source raw materials and other supplies may be interrupted by natural disasters, acts of war, terrorism, or disease outbreaks (such as the COVID-19 global pandemic), and other geopolitical and economic events.

If any of our third-party manufacturers or suppliers fails to perform their obligations to us or otherwise have an interruption in or discontinue supply to us, we may be forced to seek a different third-party manufacturer or supplier. In such event, we may experience significant delays associated with finding an alternative manufacturer or supplier that is both available on commercially acceptable terms and conditions, and also properly qualified in accordance with our specifications and any requisite regulatory requirements. This transition may require time consuming and complex operational, testing, and approval requirements, and the process could interfere with product sales because of inadequate supply or cause interruptions of, or delays in, providing products to customers.

Previously, we relied on a single source of supply in China for the bulk of our imported products. Following an 18 month process, we have been able to secure alternative sources of supply in multiple countries other than China. While this was expected to significantly improve our costs and margins, the current administration in Washington, D.C. has imposed worldwide tariffs on most countries, including those where our alternative sources of supply are located. Although the tariffs assigned to these countries are lower than those assigned to China, we have not been able to reap the expected benefit of significantly reduced tariffs due to U.S. trade policies, which continue to evolve and is discussed in more detail below.

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Governmental actions, such as tariffs, and/or foreign policy actions could adversely and unexpectedly impact our business.

Since the bulk of our products are supplied from other countries, political actions by either our trading country or our own domestic policy could impact both the availability and the cost of our products. Currently, we see this in regard to tariffs being levied on foreign sourced products entering into the United States, including from China. Beginning in January 2025, the new Presidential administration in the United States began to increase tariff rates on numerous products from a range of nations. Imported steel and aluminum products from all countries globally were assigned a new tariff rate of 25% on top of any country or product specific rates. In early April 2025, the U.S. imposed a universal baseline tariff rate of 10% on all imports globally, although steel and aluminum products tariffed at the 25% rate are exempted from the additional baseline 10% tariff. China, however, has been assigned special additional rates. For steel and aluminum products imported from China, the rates were at 70% at the end of March 2025. In June 2025, the tariff rates on steel and aluminum imports was raised to 50%. We also face uncertainty in the interpretation of new tariffs and their applicability, including with respect to customs valuation, product classification and country-of-origin determinations. Although we and our suppliers seek to comply with applicable customs laws and regulations, the application of rules regarding new tariffs can be subject to varying interpretations or future re-interpretations. It is possible that U.S. or other relevant authorities could, upon review or audit, disagree with the valuation, rules of origin or classification methods applied to certain products. Any such disagreement could result in the retroactive assessment of additional duties with interest, the imposition of penalties, or other enforcement actions without the ability to mitigate such penalties, thereby adversely affecting our operations or financial results. Furthermore, certain of our competitors may be better positioned than us to withstand or react to border taxes, tariffs or other restrictions on global trade and as a result, we may lose market share to such competitors. We cannot control the duration or depth of such actions which may increase our product costs which would in turn reduce our margins and potentially decrease the competitiveness of our products. These actions could have a negative effect on our business, results of operations, or financial condition.

We could experience delays in the delivery of our products to our customers causing us to lose business.

We purchase our products from other vendors and delay in shipment from these vendors to us could cause significant delays in our delivery to our customers. Such disruptions may include adjustments to ocean shipping schedules, labor strikes or other job-related actions by workers within the supply chain, geopolitical unrest, longshoreman or rail strikes, or government actions. This could result in a decrease in sales orders to us and we would experience a loss in profitability.

We face significant competition, which could reduce the demand for our products.

Our revenue depends in part on maintaining and growing the sales of our current products in both existing and new markets, but also by improving existing products and developing new products. There is substantial competition among companies in each of our market sectors, and a number of companies market products that compete directly with our products. Current and potential customers may consider these products from our competitors to be superior to or less expensive than our products. Some of these competitors may also have greater financial, manufacturing, and sales and market resources than us. If we are unable to effectively compete with these other products and companies, we would likely lose market share which would result in a decrease in revenue and profitability.

Outdoor product sales are highly seasonal and subject to adverse weather.

Our fencing and outdoor products are primarily bought by consumers during the spring and summer. The majority of our revenues and income from these products occur during our third and fourth quarters of our fiscal year. Demand for these products is highly affected by the weather. Adverse weather, including abnormally wet conditions or unseasonably hot or cold temperatures, can negatively affect demand for our products and cause our customers to delay, or reduce, their orders. This would have a negative effect on our business, results of operations, or financial condition.

Competitors may infringe on our intellectual property which would negatively affect our business and financial condition

We rely on our intellectual property rights, including patents, patent applications, and trademarks, to provide us with competitive advantages and protect us from theft of our intellectual property.  We believe that our patents are valid, enforceable, and valuable. If third parties infringe on our intellectual property, we may be forced to pursue litigation which would consume significant amounts of our management and financial resources. There is no guarantee that we will have the financial resources necessary to engage in litigation, or that any litigation we do pursue will result in a favorable outcome. Such infringements or unfavorable outcomes of litigation would have a negative effect on our business, results of operations, or financial condition.

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Our products may have issues that could lead to product liability claims

The products we manufacture and distribute exposes us to potential product liability risks. Although we seek to insure against such risks, there can be no assurance that such insurance coverage will be sufficient to cover any claims or adverse legal judgements, and our costs to defend any litigation could be significant. A successful product liability claim in excess of our insurance coverage could have a material negative effect on our business and financial condition. In addition, it could significantly increase our costs of this insurance on commercially reasonable terms or make it unavailable to us altogether.

Inflation could adversely affect our business

Inflation has many impacts on our business, including increasing our direct costs for raw materials, manufacturing, shipping and logistics, labor, and energy. Our ability to pass on these higher costs to our customers is limited. When we are able to increase our selling prices, it may be delayed several months after we first incur the higher costs and we may not be able to fully recoup the difference. In addition, high rates of inflation can reduce consumer’s discretionary spending and reduce demand for our products. These actions could have a negative effect on our business, results of operations, or financial condition. The increases in interest rates as a result of the higher level of inflation in the US economy experienced beginning in calendar year 2021 and continuing through 2024 has also had a negative effect on our interest expense charged on any borrowing on our lines of credit. The interest rate on our current line of credit is computed using the Prime Interest Rate, which has risen from 3.25% in January 2022 to approximately 7.50% in February 2025. Beginning on March 7, 2025, the Company began drawing against its asset-based line of credit to fund its usual seasonal build of inventory to meet its anticipated needs for the busy Spring and Summer seasons. As of the end of the most recent fiscal quarter on May 31, 2025, the Company has drawn $2,362,760 against this line of credit at a current interest rate of 12.25%.

We could lose our credit agreement and could result in our not being able to pay our creditors.

We have a line of credit with Northrim where short-term operating capital will be provided by purchasing our accounts receivable invoices for up to $6,000,000, or as a loan against our inventory for up to $4,000,000, with the maximum amount we can draw under the line of $6,000,000. The maximum draw amount is currently available, and the line will expire on June 30, 2026. If we lost access to credit, or the borrowing costs exceed the likely benefits of our use of such capital, it could negatively affect our ability to acquire inventory to fulfil our customers’ orders and pay our obligations on a timely basis. Although we are in discussions with our current lender to renew the line of credit, there can be no assurance that we will be able to successfully extend or replace this line of credit.

Our information technology systems are susceptible to certain risks, including cyber security breaches, which could adversely impact our operations and financial condition.

Our operations involve information technology systems that process, transmit and store information about our suppliers, customers, employees, and financial information. These systems face threats including telecommunication failures, natural disasters, and cyber security threats, including computer viruses, unauthorized access to our systems, and other security issues. While we have taken aggressive steps to implement security measures to protect our systems and initiated an ongoing training program to address many of the primary causes of cyber threat with all our employees, such threats change and morph almost daily. There is no guarantee our actions will secure our information systems against all threats and vulnerabilities. The compromise or failure of our information systems could have a negative effect on our business, results of operations, or financial condition.

If we fail to maintain an effective system of internal controls, we may not be able to detect fraud or report our financial results accurately, which could harm our business and we could be subject to regulatory scrutiny.

We have completed a management assessment of internal controls as prescribed by Section 404 of the Sarbanes-Oxley Act, which we were required to do in connection with our audit of our financial statements for the year ended August 31, 2024. Based on this process we did not identify any material weaknesses or significant deficiencies. Although we believe our internal controls are operating effectively, we cannot guarantee that in the future we will not identify any material weaknesses or significant deficiencies in connection with this ongoing process.

A contagious disease outbreak, such as the recent COVID-19 pandemic emergency, could have an adverse effect on our operations and financial condition

Our business could be negatively affected by an outbreak of an infectious disease due to the consequences of the actions taken by companies and governments to contain and control such an outbreak. These consequences include:

• The inability of our third-party manufacturers to manufacture or deliver products to us in a timely manner, if at all.

• Isolation requirements may prevent our employees from being able to report to work or being required to work from home or other off-site location which may prevent us from accomplishing certain functions, including receiving products from our suppliers and fulfilling orders for our customers, which may result in an inability to meet our obligations.

• Our new product launches may be delayed or require unexpected changes to be made to our new or existing products.

• The effect of the outbreak on the economy may be severe, including an economic downturn and decrease in employment levels which could result in a decrease in consumer demand for our products.

The financial impact of such an outbreak are outside our control and are not reasonable to estimate but may be significant. The costs associated with any outbreak may have an adverse impact on our operations and financial condition and not be fully recoverable or adequately covered by insurance.

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Risks Related to Our Common Shares

We may decide to acquire assets or enter into business combinations, which could be paid for, either wholly or partially with our common shares and if we decide to do this our current shareholders would experience dilution in their percentage of ownership.

Our Articles of Incorporation give our Board of Directors the right to enter into any contract without the approval of our shareholders. Therefore, our management could decide to make an investment (buy shares, loan money, etc.) without shareholder approval. If we acquire an asset or enter into a business combination, this could include exchanging a large amount of our common shares, which could dilute the ownership interest of present shareholders.

Future stock distributions could be structured in such a way as to be 1) diluting to our current shareholders or 2) could cause a change in control to new investors.

If we raise additional funds by selling more of our stock, the new shares may have rights, preferences or privileges senior to those of the rights of our existing shares. If common shares are issued in return for additional funds, the price per share could be lower than that paid by our current stockholders. The result of this would be a lessening of each present stockholder’s relative percentage interest in our company.

The Company’s common shares currently trade within the NASDAQ Capital Market in the United States. The average daily trading volume of our common stock was approximately 4,700 shares on NASDAQ for the fiscal year ended August 31, 2024 and 8,300 shares for the nine months ended May 31, 2025. With this limited trading volume, investors could find it difficult to purchase or sell our common stock or experience significant volatility in the price of our common stock. In addition, if any of the risk factors set forth above are realized, it can have a negative impact on the trading price of our common stock.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

The Company does not have any derivative financial instruments as of May 31, 2025. However, the Company is exposed to interest rate risk.

The Company’s interest income and expense are most sensitive to changes in the general level of U.S. interest rates. In this regard, changes in U.S. interest rates affect the interest earned on the Company’s cash.

The Company is subject to interest rate risk as it has an asset-based line of credit whose interest rate may fluctuate over time. The Company could be subject to increased interest payments as interest rates may change based on economic conditions, as the interest is computed at the prime rate plus 4.75%, with floor of 11%. As of May 31, 2025, the Company had borrowed $2,422,305 (August 31, 2024 - $Nil) under this line of credit.

Foreign Currency Risk

The Company operates primarily in the United States. However, a relatively small amount of business is currently conducted in currencies other than U.S. dollars, and the Company may experience an increase in foreign exchange risk as they expand their international sales. Also, to the extent that the Company uses contract manufacturers in foreign countries, currency exchange rates can influence the Company’s purchasing costs.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures

Management of the Company, including the Company’s Principal Executive Officer and Principal Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on that evaluation, our Principal Executive and Principal Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Chief Executive Officer and our Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II – OTHER INFORMATION

Item 1. Legal Proceedings

In fiscal 2021, the Company initiated arbitration against a former distributor asserting a breach of the distribution agreement and seeking damages. In February 2023, the arbitrator issued its decision and ruled in favor of the Company on the majority of all of its claims. In September 2023, the Company settled its arbitration for a cash payment of $2,450,000 which was received in October 2023.

The Company does not know of any other material, active or pending legal proceedings against them; nor is the Company involved as a plaintiff in any other material proceeding or pending litigation. The Company knows of no other active or pending proceedings against anyone that might materially adversely affect an interest of the Company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

---No Disclosure Required---

Item 3. Defaults Upon Senior Securities

---No Disclosure Required---

Item 4. Mine Safety Disclosures

---No Disclosure Required---

Item 5. Other Information

During the quarter ended May 31, 2025, no director or officer of the Company adopted or terminated a contract, instruction or written plan for the purchase or sale of securities of the Company intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) and/or a non-Rule 10b5-1 trading arrangement.

Item 6. Exhibits

				Incorporated by Reference						Filed or Furnished
No.		Exhibit Description		Form		Date Filed		Number		Herewith
3.2		Articles of Incorporation of Jewett-Cameron Company.		10-Q		1/13/2014		3.1
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act, Chad Summers								X
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act, Mitch Van Domelen								X
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C., 1350 (Section 906 of the Sarbanes-Oxley Act), Chad Summers								X
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C., 1350 (Section 906 of the Sarbanes-Oxley Act), Mitch Van Domelen								X
101.INS		XBRL Instance Document								X
101.SCH		XBRL Taxonomy Extension Schema Document								X
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document								X
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document								X
101.LAB		XBRL Taxonomy Extension Label Linkbase Document								X
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document								X

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Jewett-Cameron Trading Company Ltd.

(Registrant)

Date: July 14, 2025		/s/ “Chad Summers”
		Chad Summers, President and Chief Executive Officer (Principal Executive Officer)

Date: July 14, 2025		/s/ “Mitch Van Domelen”
		Mitch Van Domelen, Chief Financial Officer and Corporate Secretary (Principal Financial Officer and Principal Accounting Officer)

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FAQ

What drove Jewett-Cameron’s Q3 2025 net loss?

Lower sales (-21 %), tariff-induced cost spikes, higher freight and a cedar fencing supply shortfall pushed the quarter to a $0.65 million loss.

How much cash and debt does JCTCF have after Q3 2025?

Cash and equivalents were $1.20 million; bank indebtedness drawn on the credit line was $2.42 million.

What is the status of the former seed facility asset?

The 11.6-acre property is listed for sale at $9 million; carrying value on the balance sheet is $0.57 million.

How significant are tariffs to the company’s cost structure?

Imported steel/aluminium products now face a 50 % global tariff, and China-origin goods up to 95 %, materially impacting product costs and pricing.

Has the company secured sufficient liquidity for the next year?

Yes; the $6 million asset-based line of credit was renewed to 30-Jun-2026, and management believes working capital needs are covered.

Which product lines showed growth despite the downturn?

Lifetime Steel Post® (sales +85 %) and MyEcoWorld® sustainable bags (sales +265 %).